NEW YORK: Wall Street stocks ended mixed on Tuesday (Feb 14) after US consumer price data for January offered little to change expectations about the Federal Reserve'’s (Fed) path forward on interest rate increases.
The S&P 500 declined 0.03% to end at 4,136.17 points.
The Nasdaq gained 0.57% at 11,960.15 points, while Dow Jones Industrial Average declined 0.46% to 34,089.40 points.
US consumer prices accelerated as Americans continued to be burdened by higher rental housing costs, suggesting that the Fed will maintain its fight against inflation.
“Inflation remains elevated, albeit it appears to be slowing,” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis. “Looking at today’s price action, I think it might be a little bit of profit-taking on the heels of strong year-to-date performance.”
Money market traders are betting on at least two more 25 basis point rate increases this year, with interest rates seen peaking at 5.28% by July.
Also adding to the investor angst were hawkish remarks by Richmond Fed president Thomas Barkin and Dallas Fed president Lorie Logan. Barkin said the Fed needs to prioritise quashing inflation over risks to US economic growth.
Higher prices for food, shelter, energy and other items suggest that the hoped-for “disinflation” has not arrived, said Steve Sosnick, chief strategist at Interactive Brokers.
But he described sentiment as broadly bullish.
“Right now the momentum in the stock market is generally positive and stock traders are looking for an excuse to rally,” Sosnick said.
Investors will closely watch January retail sales data on Wednesday for hints on consumer spending amid worries of an economic slowdown.
Shares of Boeing Co rose 1.3% to their highest in over a year after Air India unveiled a deal to buy 220 of its passenger planes.
Coca-Cola Co slipped 1.7% despite a strong full-year profit forecast.
Marriott International Inc rose 4% after the hotel operator forecast first-quarter earnings above Wall Street estimates as it benefited from strong travel demand.
Palantir Technologies soared more than 21% after the data analytics firm forecast its first profitable year. – Reuters, AFP